CHOICE Equity Income Portfolio
If you appreciate the value of a growing stream of income over time, you may find the Equity Income Portfolio appealing. Only stocks that pay a dividend exceeding the market rate and that have increased that dividend three consecutive years or six of the last ten are considered candidates for Equity Income. The result is a portfolio that should be more conservative than our Leaders and Special Opportunities portfolios, with a beta that is usually less than 2/3 of the market. Dividends have comprised about 40% of the S&P’s total return over the last 75 years, and recent changes in the tax law have made dividend income even more attractive for recipients.

On occasion, convertible preferreds or bonds may be included for current yield and growth from the underlying common. The convertible asset class over the last 30 years has participated in 70% of the upward equity market movements, but only 52% of the downside movements, yielding annual returns nearly in line with the market with much lower volatility.

Stock selection is equally as important as dividend history in building this portfolio. Turnover typically has been less than 40%, although there can be no assurance that that will remain constant in the future. The portfolio may be less diversified by industry group than others, because the universe of dividend-paying securities tends to be concentrated in certain sectors, but most sectors usually are represented.

 CHOICE Asset Management View of the Current Market

Performance results reflect the total return of a composite of all Equity Income separately managed accounts. Such returns are before management fees and will fluctuate so that an investment may be worth more or less than its original cost. Current performance may be lower or higher than the performance data quoted. Yields will vary. Past performance does not guarantee future results.